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Maruti joins recall list with 100,000 A-Stars

Maruti joins recall list with 100,000 A-Stars
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First Published: Tue, Feb 23 2010. 11 57 PM IST

Updated: Tue, Feb 23 2010. 11 57 PM IST
Chennai: In the biggest ever recall affecting the Indian automobile industry, Maruti Suzuki India Ltd, the country’s largest car maker, plans to replace the fuel pump gasket in as many as 100,000 cars due to a quality defect, the company said. The cars include those that are exported to Europe and could hurt the credibility of the company and Indian car makers in the eyes of customers there.
The defect was spotted in November in the company’s A-Star model as a result of internal quality monitoring by the company. In December, Maruti started sending letters to customers asking them to bring their cars to dealerships in order to replace the part. No customer complaint was received and the company termed the replacement of the part as “proactive”.
“In case fuel is filled up to brim, beyond fuel auto cut off position, a possible fuel leakage from fuel pump mounting area may take place... We decided to check all vehicles from the lot, around 1 lakh units, including those exported overseas,” the company said in a statement.
The cars affected were manufactured between October 2008 and 22 August 2009.
A total of 175,000 A-Stars have been produced so far, of which at least 100,000 have been exported.
This is not the first instance of recall affecting Maruti Suzuki. In 2000, the company had issued advertisements for the recall of 76,000 Omni vans due to a defect in the wiring harness, which was a safety related issue. However, only around 75% of car owners came forward and got the part replaced.
Around 50,000 Zens made in 1997 were recalled due to a defect in the steering column.
The Maruti replacement comes at a time when Japanese car makers have been scrambling to deal with recalls. In January, Toyota Motor Corp. said it was recalling nearly eight million cars in Europe and the US and suspending production of top-selling models such as the Corolla due to a problem with the braking system. In February, Honda Motor Co. said it was recalling cars worldwide to fix a fault with airbags. The recall affected 8,532 cars in India.
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The fuel pump gasket prevents petrol from flowing out of the fuel tank and the replacement cost has been estimated at around Rs150 per car by the company. While most of the cost would be borne by the Gurgaon-based supplier, the company had provisioned for replacement costs in third quarter results announced in January. It declined to specify the amount.
Launched in November 2008, the A-Star is also the company’s top-selling export model to Europe, where it is sold under the Alto badge. The company also has a contract manufacturing arrangement with Nissan Motor Co. to sell the cars under the Pixo badge in Europe.
Maruti, which has not issued a formal recall notice in newspapers and other media, said it decided against doing so as this was not a safety-related issue. No formal recall notice has been issued in Europe. “We are following exactly the same procedures in both markets,” said a person familiar with the matter who declined to be named.
The company has not received any cancellations in export orders, according to the same person cited above.
Car makers often shy away from issuing advertisements in newspapers due to the stigma attached to product recalls in India.
Legal experts concurred with the stand the company took.
“There is legally nothing wrong with the company not issuing advertisement in newspaper though the real motive could have been to avoid adverse publicity,” said Jayant Bhushan, senior advocate, Delhi high court. “Under our procedural law, the company should have, in fact, sent letters or notices to consumers.”
But problems that crop after several years need to be widely publicized through newspaper advertisements as the product could have changed hands, according to Mohit Arora, executive director, JD Power Asia Pacific Inc.
The news about recall affected the car maker’s stock, which fell sharply on the Bombay Stock Exchange (BSE). It ended the day down 3.24% at Rs1,336.85. The BSE Sensex rose 0.3% to close at 16,286.32.
Graphics by Paras Jain/Mint
Manish Ranjan in New Delhi contributed to this story.
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First Published: Tue, Feb 23 2010. 11 57 PM IST